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Labour’s conference: good news, bad news and missed opportunities

Labour Conference 2014A review of last week’s Labour conference in Manchester by Martin Mayer, arepresentative of Unite the Union on Labour’s national executive

There was certainly some very good news at this year’s Labour conference, notably on the health service but also some other policy commitments which will make a real difference to working people – and mark out Labour as the progressive choice for voters at the next election. But there was bad news too with Labour boxing itself into the strictures of “austerity-lite“, promising further deflationary economics and damaging cuts affecting Labour’s natural supporters – and would-be voters.

And what about the things Labour did not say? There were several key issues where Labour has still failed to listen to the trade unions on policy issues that could have provided that bold message of hope to millions of doubtful working class voters – and potentially swept Labour into power with a thumping majority in 2015.

So first the good news. Ed Milliband’s speech contained 6 policy priorities – and he saved the biggest one till last – the NHS. Here we now have a very clear message that Labour will reverse the NHS Reform Act and end the market within our health service. But better than that, there is also a commitment to invest £2.5bn to rebuild the NHS and make it fit for the 21st century – including recruiting 3000 midwives, 5000 care workers, 8000 doctors and 20,000 new nurses. This will be funded via a mansion tax on homes worth over £2m, a levy on the tobacco companies and the recovery of missing taxes from hedge funds. Andy Burnham’s speech the following day elaborated further on the need to integrate health and social care and maybe a much better deal for low paid care workers in the notorious private sector. Defence of our NHS must now be centre stage in Labour’s 2015 manifesto and is a sure-fire vote winner for us.

A really welcome surprise in Ed’s speech was a new policy priority on green energy and climate change. There were firm commitments to boost investment in low carbon technologies and make UK electricity generation carbon free by 2030 with 1 million new green jobs, the insulation of 5 million homes by 2020 and the setting up of a Green Investment Bank to raise finance for sustainable investment. This is terrific news and will tap into huge potential support from a disparate section of the electorate who are desperately concerned about the environment but had written Labour off as no different from the Tories.

Other good news items in Ed Milliband’s speech including a massive increase in apprenticeships, stimulated by new requirements on employers who hire overseas workers or who win public sector contracts. There are measures to address the cost of living crisis and get Britain working again including a commitment to halve those on poverty pay by 2025, but though good, they began to fall a little short of what Labour could have offered. For instance, the week’s new announcement of an increase in the national minimum wage to £8 was deflated when we saw the small print – to be phased in by 2019! The living wage (already higher than £8 in London!) is to be “encouraged” by giving away tax incentives to employers of up to £1000 per worker. And for some reason Chuka Umunna seemed to restrict the promise on zero hours contracts to those that are “exploitative.” Does that mean the ridiculous notion of a contract with no guaranteed work could still continue?

Banks are to be broken up to encourage competition but no talk of the urgent need to re-regulate the financial sector which wreaked so much havoc on our economy in 2008. A bold pledge to build 2.5 million homes by 2015 – but this is a private sector home ownership vision with less said about Labour rebuilding our depleted council house stock than at last year’s conference.

And now for the bad news. Ed Balls is apparently immune to all the lobbying from the trade unions on the need to reject austerity and offer a clear bold message of hope and sustainable growth to millions of hard-pressed working class families. He is committing us to the Tories’ spending plans for the first 12 months with no new spending unless it can be fully funded from elsewhere. As if to increase Labour sado-masochism on the economy, Labour will not even borrow for investment in growth and will commit itself to balancing the books by the end of its first parliamentary term. It’s a desperately right wing and anti-Keynesian strategy designed to impress the City and the Daily Mail – but surely not a vote catcher with the millions of working class families who turned off Labour at the last election.

The fact is austerity isn’t working. Cutting spending and putting public sector workers out of work or reducing their pay, cutting welfare benefits and investment in our economy is patently deflationary and consequently reduces tax income to the Treasury whilst increasing the cost of supporting unemployment and low pay. Hardly the best way to reduce the government’s deficit. Indeed the deficit fell faster in the last two years of the Labour Government 2008-2010 than in any subsequent year of austerity spending cuts under George Osborne! Just think what we could have done with a positive message of hope and sustainable growth, putting people back to work, raising prosperity, increasing tax revenues to the Treasury and cutting the deficit – all at the same time!

So austerity cuts will continue under a Labour Government. But it was the three areas he mentioned in his speech which must give rise to serious concern. He promised the Public Sector Pay Review Bodies’ recommendations would not be blocked by a Labour Government, unlike the 1% rise for NHS workers disgracefully blocked by George Osborne. But this means pay restraint on public sector workers will continue. Haven’t they borne the brunt of the ConDems’ austerity spending cuts already – made to pay the price for an economic crisis not of their making. As if to deliberately make matters worse Ed Balls promised further rises in the retirement age for public sector workers who are already facing “work-till-you-drop” 67 plus. For millions of disillusioned public sector workers and their families this sets them on a collision course with the next labour Government as trade union militancy builds up this October to challenge interminable pay restraint that has left them losing more in real take home pay than any other group of workers.

The unkindest cut of all was the pledge to cap child benefit at 1% in the first year of a Labour Government. With child poverty spiralling out of control and a million people now using food banks, this is the last benefit that should have been touched. It’s not just working families but working mothers who will be hit – mums who often have the hardest challenge of all to put food on the table in times of austerity and declining living standards. But why did he do it? To impress the right wing and the press that he can be as tough on the poorest people in our society as the Tories? Maybe, but it is a clear vote loser for millions of working class families and further demonstrates that Labour intends to be hard on welfare benefits, in spite of the fact that benefit claimants have suffered real degradation and extreme poverty under this ConDem Government. Labour could have shown it offers a fairer way and a progressive and more equal society. I detect real anger out there on the doorstep on this one.

There was something else that was bad. It was at the start of Ed Miliband’s speech when he declared Labour would support the Government’s call for UK to join the USA and France in a new coalition for air strikes against Isis in Iraq. It seems as if the tremendous kudos he won by almost singlehandedly stopping western military intervention in Syria is to be blown away. He also earned genuine respect by publicly rejecting Blair’s reasons for intervention in the Iraq war in 2003. It’s true he declared that any military action must be accompanied by real political and diplomatic effort too, but surely Labour must have learnt the lesson by now that western military intervention in Iraq – or even Syria – is the last thing the region needs. Horrified though we all are at the grisly beheading of innocent westerners on video and the fanatical totalitarian regime they are enforcing across the region, bombing them from the air will not change any of that and will make matters worse.

My union UNITE and many of the other trade unions have been lobbying for a number of measures which have failed to be taken up – or if they have in very diluted form. These are the missed opportunities which will make the difference between a Labour Party that stands a good chance a scraping through to victory with a fragile majority (or heaven forbid in a coalition with the LibDems!) or sweeping into power with a massive majority because millions of working class voters are inspired to come out to vote for them.

Instead of the meagre £1.5b in taxes which Labour is pledging to recover, it could have set out to recover a substantial part of the estimated £120b missing tax billions evaded, avoided or simply uncollected by HMRC each year (according to civil service union PCS and radical tax specialist Richard Murphy). Just think of the difference this would have made. After all George Osborne’s first austerity budget in 2010 forecast £81B of cuts over 4 years. Not a single penny of cuts is necessary if Labour acts on this.

Secondly the renationalisation of public services – apparently still a taboo word in Labour leadership circles but clearly very popular according to the opinion polls. Labour could have pledged to renationalise Britain’s railways. This would be achieved at no cost simply by letting existing franchises expire and hand them over to Directly Operated Railways which has made such a success of the East Coast Mainline (paying over £1B in profit to the Treasury already). The infrastructure is already back in public ownership in all but name under Network Rail. Instead Labour retains a tortuous policy of backing a public sector provider entitled to bid for contracts (but with no borrowing powers) against powerful multinational train companies. A bolder policy of bringing back rail into public ownership would also have saved us billions of pounds a year as it is estimated our privately run rail network cost 4 times as much to run. Manuel Cortes, general secretary of TSSA, made his best ever speech on this at conference and extended the argument to other vital public services like water and energy. If Germany and France can renationalise why can’t we?

Thirdly whilst the promise to build 250,000 new homes is very welcome and certainly needed, the best sure-fire way of solving our housing crisis and rebuilding our economy would have been a massive commitment to build new council homes. This was a central plank of the 1945 Labour Government’s manifesto – when Government debt was higher in real terms than it is today. Unlike building new homes to buy, built by the private sector for profit, a council house building programme is directed and funded by public funds meaning it really can be delivered. Not only would it put construction workers back to work, it would stimulate jobs across a range of industrial sectors producing all the items that go toward making a house a home.

More than any other form of public expenditure this would stimulate the economy, bringing in tax revenues and reducing Government payments in welfare benefits – and so reduce the deficit faster than austerity ever can. Better than that it would directly address the real scandal in UK housing sector today – the soaring private sector rents which are causing misery to millions of working class people who could never ever hope to buy their own home. Building our own homes with affordable rents would dramatically reduce the nation’s highly inflated housing benefit bill which goes directly to the landlord. For all the media attention on welfare benefits, they cost less in total than housing benefit – and 9 out of ten new claims are from working class families in work.

For trade unions our biggest disappointment is Labour’s continued failure to really recognise the importance of trade union and workers rights. Even the Tories latest attacks are not be reversed in full – tribunal fees according to Chuka Umunna should be “affordable” not reversed altogether and there’s no pledge to reverse the iniquitous 2 years service requirement to take a claim for unfair dismissal. Although Labour is saying the right things about low pay and the need to bring 2 million workers out of poverty, raising the floor of the labour market by increasing thenational minimum wage and encouraging more workers to enjoy the Living Wage will not touch the living standards of Labour’s core voters on £8 to £12 per hour now.

Britain needs a Pay Rise” says the TUC and hundreds of thousands of trade unionists will march in London on 18 October to say just that. Realistically this can only be delivered by extending collective bargaining which tragically only covers 23% of workers today compared to over 85% of workers back in 1979. Trade unions are a force for good in society. We deliver health and safety at work, justice and respect and equal rights. But we also help to distribute wealth from the employer’s profits to the workers and make Britain fairer and more prosperous. It is no coincidence that suppressing trade union rights and reducing the cover of collective bargaining agreements has directly contributed to the massive shift in wealth and power from working people to a tiny and fabulously rich elite. If we are to make a real difference to that then Labour needs to embrace trade unions, gives us our freedom and back workers on strike instead of the employer.

Much was said at conference about learning the lessons from the Scottish referendum where 45% of the electorate were so disillusioned with Westminster politics they were prepared to take the gamble and vote for independence. Many of these were the poor working class voters from previous Labour strongholds like Glasgow where disillusionment with Labour is rife. UNITE’s General Secretary Len McCluskey in a barn-storming speech only hours prior to Ed Balls’ austerity-lite address, called on Labour “to make the Scottish referendum the tombstone of 20 years of Labour’s indifference to working class voters“. Perhaps there was enough good news at this year’s conference to win some of those back but we have missed the opportunity Len McCluskey called for to inspire millions of working class voters to sweep us into power with the massive majority we really need in 2015.

And finally a thought on internal Labour Party democracy. Many years ago Labour Conference debated and made policy. Today we have a long drawn out, imperfect but inclusive process of policy commissions and the national policy forum in which all party members can have their say. But Ed Balls speech to conference contained things which had never been discussed or even consulted with the rest of the party (rumour has it even some shadow cabinet ministers did not know in advance). Can we really accept that the most important policies of all about the economy – and yes about child benefit being capped!- are the exclusive prerogative of the Labour leadership? In my mind it makes a mockery of Labour’s “democratic policy making process“.

One Comment

  1. swatantra says:

    A pretty uninspiring and unmemorable experience for all concerned.

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